Correlation Between Plug Power and Lowland Investment
Can any of the company-specific risk be diversified away by investing in both Plug Power and Lowland Investment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Plug Power and Lowland Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plug Power and Lowland Investment Co, you can compare the effects of market volatilities on Plug Power and Lowland Investment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Plug Power with a short position of Lowland Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plug Power and Lowland Investment.
Diversification Opportunities for Plug Power and Lowland Investment
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Plug and Lowland is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Plug Power and Lowland Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowland Investment and Plug Power is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Plug Power are associated (or correlated) with Lowland Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowland Investment has no effect on the direction of Plug Power i.e., Plug Power and Lowland Investment go up and down completely randomly.
Pair Corralation between Plug Power and Lowland Investment
Assuming the 90 days trading horizon Plug Power is expected to under-perform the Lowland Investment. In addition to that, Plug Power is 6.65 times more volatile than Lowland Investment Co. It trades about -0.01 of its total potential returns per unit of risk. Lowland Investment Co is currently generating about 0.05 per unit of volatility. If you would invest 11,494 in Lowland Investment Co on September 12, 2024 and sell it today you would earn a total of 1,206 from holding Lowland Investment Co or generate 10.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plug Power vs. Lowland Investment Co
Performance |
| Timeline |
| Plug Power |
| Lowland Investment |
Plug Power and Lowland Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plug Power and Lowland Investment
The main advantage of trading using opposite Plug Power and Lowland Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plug Power position performs unexpectedly, Lowland Investment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lowland Investment will offset losses from the drop in Lowland Investment's long position.| Plug Power vs. Hilton Food Group | Plug Power vs. Roebuck Food Group | Plug Power vs. GoldMining | Plug Power vs. Cornish Metals |
| Lowland Investment vs. Systemair AB | Lowland Investment vs. Bell Food Group | Lowland Investment vs. Finnair Oyj | Lowland Investment vs. Sligro Food Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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